Benjamin Franklin

There are a few ways in which the future of bookstores will resemble the past. Here’s one you might not know about: The money in bookstores has never been in selling books.

Don’t believe me? Read The Autobiography of Benjamin Franklin. Franklin was a printer, a publisher, a newspaperman, a bookseller, and of course an author, scientist, inventor, and über-citizen. Do you know where he made his money? His stationery shop. He sold bookplates, printed invitations, letterhead, and plain writing paper. This was always the high-margin AND high-volume end of his business. Franklin’s newspapers, pamphlets, and books were a labor of love, patriotism, and intellectual overflow, but functionally, they were loss leaders.

And really, this is still the way bookstores work. Yes, we go in to browse, be comforted by, and perhaps even purchase books — but really, the big-ticket items are greeting cards, blank books, calendars, wrapping paper, college sweatshirts, candy, coffee. That, at least, is where the money is. Booksellers are still primarily dealers in 1) paper and 2) social goods — books are merely the low-profit-but-high-prestige emblem of that intersection.

Of course, now big-box retailers are using books as loss leaders in a very different way — selling hot books below WHOLESALE in the hope of getting you in the store to buy a big-screen TV. It’s not just books and media, but also groceries, tube socks, and prescription drugs. The Targets, Wal-Marts, and Best Buys of the world arguably have just taken the stationers’ model to parodic heights. And since there wasn’t exactly an independent tube-sock market before, the people who stand the most to lose from this are booksellers. Booksellers who, again, are already selling books as loss leaders to get people into the store to buy their high-margin items. You can be more charitable and say that the sale of the high-margin items subsidizes the sale of the books, which is what sellers and readers REALLY care about. But functionally, it’s the same model. It’s just that when it comes to high-margin goods, a photo album simply can’t beat a Blu-Ray player — so Wal-Mart can “subsidize” their book sales a lot more than the booksellers can.

For our members-locally owned, independent bookstores-the effect will be devastating. There is simply no way for ABA members to compete. The net result will be the closing of many independent bookstores, and a concentration of power in the book industry in very few hands. Bill Petrocelli, owner of Book Passage in Corte Madera, California, an ABA member, was also quoted in the New York Times:

“You have a choke point where millions of writers are trying to reach millions of readers. But if it all has to go through a narrow funnel where there are only four or five buyers deciding what’s going to get published, the business is in trouble.”

We would find these practices questionable were they taking place in the market for widgets. That they are taking place in the market for books is catastrophic. If left unchecked, these predatory pricing policies will devastate not only the book industry, but our collective ability to maintain a society where the widest range of ideas are always made available to the public, and will allow the few remaining mega booksellers to raise prices to consumers unchecked.

Okay. So let’s just grant all of that stuff about independent booksellers – or hell, even chains like B&N or Borders, so long as they primarily sell books – being essential to the functioning of a free society. I’ve got my doubts about how or why that might be true, and way too much (bookstores, newspapers, the American auto industry) seems essential to the functioning of a free society these days — but screw it. In the case of bookstores, I want to believe it.

At the very least, let’s grant that bookstores are awesome, and add a lot of value to their communities. Let’s also grant that even if the DoJ tries to keep big-boxers from selling below wholesale, they’re still going to exert a lot of price pressure on bookstores so long as they’re selling books cheaply. We can also assume that online bookstores, too, are going to continue to chip away at brick-and-mortars by offering greater selection at a lower price. And let’s assume – or pray – that the ABA’s request that “the loss-leader pricing of digital content also bears scrutiny” by the DoJ doesn’t lead to crushingly high price-fixing on that end. Then we need to figure out a new business model that can keep local brick-and-mortar booksellers alive.

Reservable space for book clubs, writers rooms, or study carrels; membership with buy-back options for a second-hand book market run out of the same space; certain shopping hours reserved for members or donors; use of volunteer labor, like a food coop; sponsorships from the people or businesses in the neighborhood most interested in the social value of the store and most interested in being known as local machers.

The core idea is to appeal to that small subset of customers who think of bookstores as their “third place”, alongside home and work. These people care about the store’s existence in physical (and therefore social) space; the goal would be to generate enough revenue from them to make the difference between red and black ink, and to make the new bargain not just acceptable but desirable for all parties. A small collection of patron saints who helped keep a local bookstore open could be cheaply smothered in appreciation by the culture they help support.

There are already existing models for this, like the mighty Seminary Co-Op bookstore in Chicago. Barnes & Noble offers paid memberships that translate into free shipping and discounted books, well worth it for high-volume purchasers. It seems to keep the Sem Co-Op running, and probably nets a significant profit for B&N, so there are good reasons to think that this program has got a shot — especially if bookstores are inventive in how they come up with member benefits. For instance, it would be fascinating to see a bookstore run as a real co-op, with members actively driving the direction of the store. The Sem Co-Op certainly gets a lot of feedback and advice from its members (especially the U of C profs), but it’s pretty far from direct democracy.

At the Harvard Bookstore, they have someone who spends the day mousing around on Google Book Search, looking for weird and cool titles in the public domain to print and shelve around the store, as suggestions for the sort of thing you might have printed for yourself. This is a purely curatorial role, the classic thing that a great retailer does, and it’s one of the most exciting bookstore sections I’ve browsed in years. And even so, there’s lots of room for improvement: Google Books produces the blandest, most boring covers for its PD books, and there’s plenty of room for stores to add value with their own covers, with customer-supplied covers (the gift possibilities are bottomless), and so on. I can even imagine the profs across the street producing annotated versions — say, a treatise on Alice in Wonderland with reproductions of ten different editions’ illustrations and selling them through the store’s printer and shelf-space, restoring the ancient bookseller/book-publisher role.

Of course, most of the mass-produced catalog will probably end up in the print-on-demand catalog some day, and stores will be able to fill those orders, too. But if you already know what book you want, why bother going to a store? (Unless you’re in too much of a hurry to wait for the mail).

On the other hand, there’s plenty of ways that a physical store could offer added value on mass-market titles: localized covers, signed books, high production-value gift editions, a point-of-sale “donate to our neighborhood schools” kiosk that lets you print a book on the spot for a classroom that’s requested it…

The key point seems to be that bookstore patrons today are kind of like the Republican Party — almost everyone who hasn’t given up on the project altogether is a zealot. To stay alive, bookstores need to foster their communities and harness that zealotry, making sure that they don’t lose a generation of future zealots simply because they didn’t show up.

I like Doctorow’s formulation: “In that world, booksellers become a lot more like bloggers who specialize in all things bookish — wunderkammerers who stock exactly the right book for the right people in the right neighborhood.”

Now this actually loses bookstores the pure democracy argument. It will no longer be the case that bookstores are the only places offering salvatio — er, I mean, books. Bookstores might not be our Catholic churches, where everyone is welcome — but they could be our hard, thrifty Puritan churches, whose members go out into the world and demonstrate their salvation through their worldly works.